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Asian Session - BoJ Holds at 0.50%
April 30, 2008 12:10 PM CEST
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G10 Advancers and Decliners vs USD |
| | AUD | 0.29 |  | | | NZD | 0.22 | | | | CHF | 0.10 | | | | EUR | 0.06 | | | | CAD | 0.08 | | | | DKK | 0.08 | | | | NOK | 0.03 | |  | SEK | -0.05 | | | JPY | -0.12 | | | GBP | -0.38 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 13,846.99 | - 0.31 | | Hang Seng Index | 25,883.96 | - 0.17 | | Shanghai Index | 3,696.45 | + 4.91 | | FTSE futures | 6,100.00 | - 0.14 | | CAC futures | 6,932.00 | - 0.04 | | SMI Futures | 7,444.00 | - 1.26 | | DJIA futures | 12,832.00 | + 0.04 |
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World Markets |
Current Level |
% Change |
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| Gold | 874.50 | + 0.46 | | Silver | 16.57 | + 0.07 | | VIX | 20.24 | + 3.05 | | Crude wti | 115.82 | + 0.16 | | USD Index | 72.79 | - 0.14 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| CPI (Apr Prov.) | 0.5%(+3.4% | +3.5% | EZ / 10.00 | | Unemployment Rate (Apr) | 7.1% | 7.1% | EZ / 10.00 | | EC Economic Confidence ESI (Apr) | 98.9 | 99.6 | EZ / 10.00 | | GfK Consumer Confidence (Apr) | -20 | -19 | UK / 10.30 | | Base rate Announcement | 5.75% | 5.75% | PD / 12.00 | | ADP Change In Private Sector Employment (Apr) | -60,000 | +8,000 | US / 13.15 | | GDP (Q1 Prov.) q/q Ann. | +0.5% | +0.6% | US / 13.30 | | Employment Cost Index (Q1) | +0.8% | +0.8% | US / 13.30 | | Core PCE (1q a) | 2.2% | 2.5% | US / 13.30 | | GDP (feb) m/m | 0.2% | 0.6% | CA / 13.30 | | Chicago PMI (Apr) | 47.5 | 48.2 | US / 14.15 | | Fed Interest Rate Announcement | 2.00% | 2.25% | US / 19.15 |
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Currency Tech |
AUDUSD
R 3: 0.9544
R 2: 0.9496
R 1: 0.9422
CURRENT: 0.9353
S 1: 0.9292
S 2: 0.9272
S 3: 0.9249
EURJPY
R 3: 164.98
R 2: 163.88
R 1: 163.25
CURRENT: 161.80
S 1: 160.81
S 2: 159.83
S 3: 158.24
USDSGD
R 3: 1.3887
R 2: 1.3746
R 1: 1.3659
CURRENT: 1.3612
S 1: 1.3571
S 2: 1.3470
S 3: 1.3318
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Market Brief |
EurUsd was stuck in a tight range in Asian session as traders await the FOMC. UsdJpy rallied on the weak Japanese data to 104.21 but pulled back to 103.75 in late day trading.
US stocks closed mixed once again on Tuesday, ahead of the Q1 GDP data and the Federal Reserve rate decision expected today. The NASDAQ managed small gains, while the DJIA and the S&P500 closed slightly lower. Four of the ten sectors posted gains while six others sold off, led by Energy (-1.5%) and Materials (-3.1%), both of which saw profit-taking as the dollar gained ground. On another busy day of results, the headliners were Visa and MasterCard, both strongly up on the back of results. Merck was the main negative headline of the day, as the company reported that a cholesterol drug was unexpectedly denied approval by the FDA. The economic news on the day was poor as the housing market remains in a rut with further spurt of negative housing data. The Nikkei declined a little (-0.32 %) & the HSI (-0.18%) lost some grounds during in the last trading hours mostly because of finincials. It appears that Citigroup's announcement panned out over Asian markets dragging their shares down.European Futures are trading slighlty above fair value this morning, on average CAC & SX5E (+ 7 Bps) & Dax ( +11 Bps), despite the SAP missed analyst's expectations for 2007. This being said Alcatel posted some encouraging results this morning.
Fed Fund Futures shifted slightly with up to 80% of the market predicting a 25bp cut with now only 20% looking for a hold. In addition the Fed fund futures, suggest that most market participants expect the Fed to end their easing cycle. While we are in the 25bp to 2.00% camp today, we also believe that the market has become too complacent regarding the risks to the US economy and further financial market problems. In the US the housing market continues to deteriorate while the economic data, specifically the consumer confidence, remains very soft (yesterday Conference Board slipped to 62.3). This could directly effect the mortgage credit problem which seem to be accelerating in recent weeks. With eight weeks pause, instead of the normal 6 weeks seperating the meetings, it is possible that the accompanying statement could be misleading since 8 weeks is almost the same as a state furlough. Yesterday the FT in analysing the Fed's mindset suggested that members don’t see “tail risk” falling significantly and that “markets are still fragile and vulnerable to bad news”.This is very true since in the eight weeks to come there are lots of US data which are expected to disappoint the market and the Fed. Whatever the Fed does and says today we expect additional cuts in 2008 as economic data continues to point towards negative appraisals.
Just hours before the FOMC announcement provisional estimates for Q1 GDP will be released. There are risks of a sharp rebound due to contribution from inventories, however slowing consumer spending, weak consumer confidence and declining job figures have us leaning to the weak side. As an intraday play we believe the GDP figures could be the real market mover. Should the figure surprise and point to the upside we should see a strong Usd rally before the Fed's meeting.
In this first meeting as BoJ Chairman Masaaki Shirakawa kept rates on hold at 0.50% as was widely expected. The central Bank also noted “Japan's economic growth is slowing mainly due to the effects of high energy and material prices”. This is cutting its growth forecast amid concerns of a recession. But to make matters worse, Japan's Industrial production fell to -3.1% vs. -0.8% exp which was the fastest decline in 5 years. As we have stated in previous reports we are very bearish on the Japanese economy and the Jpy.
12.55gmt - ECB’s Trichet Speaks in Aachen, Germany
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